US-based mobile commerce platforms Letgo and OfferUp agreed yesterday to merge in a deal fuelled by a $120m funding round led by classified listings operator OLX Group.
OLX Group, a subsidiary of for e-commerce and media group Naspers’ internet assets division, Prosus, is an existing investor in Letgo and will take a 40% stake in the merged business.
The $120m round included existing OfferUp investors including venture capital firm Andreessen Horowitz and private equity firm Warburg Pincus.
Founded in 2015, Letgo operates an online platform that enables users to buy and sell goods to each other. The service is tailored for mobile use, meaning large photos of each item and enhanced chat functionality.
OfferUp will run the combined company and chairman and CEO Nick Huzar will retain his positions. Alec Oxenford, Letgo’s co-founder and president, will be part of its board of directors while OLX will continue to run Letgo’s business outside of North America.
The company had disclosed a total of $975m in funding prior to the deal, its first disclosed financing being a $100m investment by Naspers in 2015. Undisclosed investors provided a further $100m the following year to fund its purchase of European competitor Wallapop.
Naspers joined 14W, Accel, Insight Partners and New Enterprise Associates to supply $175m in series C funding for Letgo, which revealed Eight Roads Ventures – part of financial services and investment group Fidelity – Mangrove Capital Partners and FJ Lab as backers, in 2017.
Letgo added $100m from unnamed investors at a $1bn valuation later the same year, before Naspers agreed in August 2018 to commit another $500m in funding.
OfferUp had raised a total of $250m pre-acquisition, from investors also including GGV Capital, Alimeter Capital, Jackson Square Ventures, Coatue Management, Tiger Global Management, Vy Capital, High Line Venture Partners, Allen & Company and Max Levchin.
Allen & Company is financial adviser for OfferUp on the deal while Perkins Coie is legal adviser. LetGo and OLX are being advised by Cravath Swaine & Moore while Morrison & Foerster is doing the same for Letgo’s management team and minority shareholders.
